IBM Claims Twitter Infringes On At Least 3 Of Its Patents, According To Twitter’s Latest S-1 Update

As Twitter embarks on its initial public offering roadshow, the company has issued another update to its S-1 today with a bit of a curveball: the company recently has been issued with a letter from IBM alleging that Twitter infringes on “at least three U.S. patents” held by IBM, “inviting us to negotiate a business resolution of the allegations.” The disclosure comes at the same time that Twitter has also raised its IPO estimate to $23-25 per share, up from the previous $17-20 – a sign of Twitter’s confidence that despite details like the IBM note, it’s expecting a strong turnout when it lists.

The S-1 filing appears to indicate that although IBM is seeking a settlement over the alleged infringement, it looks like Twitter is ready to defend itself. “We believe we have meritorious defenses to IBM’s allegations, although there can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us,” the company writes.

The specific patents in question are U.S. Patent No. 6,957,224: Efficient retrieval of uniform resource locators; U.S. Patent No. 7,072,849: Method for presenting advertising in an interactive service; and U.S. Patent No. 7,099,862: Programmatic discovery of common contacts.

The note appears in an update to the S-1 that offers extended caveats on how patents, copyrights, trademarks and trade secrets are frequently the subject of litigation. Twitter admits that it’s not a strong player in this area.

“Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual property portfolios than we do, which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for patent, or other intellectual property infringement,” it writes, with a special flag for trolls. “In addition, various ‘non-practicing entities’ that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies.”

Although Twitter has shown itself up to now to be a very developer-friendly player in the patent space, it is salvos like IBMs that may prove to test that resolve, especially as Twitter continues to evolve its service and move into new areas – a point it also makes, adding that right now it’s also potentially liable for claims against its partners and customers, too.

“From time to time we may introduce new products and services, including in areas where we currently do not have an offering, which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities,” it writes. “In addition, although our standard terms and conditions for our Promoted Products and public APIs do not provide advertisers and platform partners with indemnification for intellectual property claims against them, some of our agreements with advertisers, platform partners and data partners require us to indemnify them for certain intellectual property claims against them, which could require us to incur considerable costs in defending such claims, and may require us to pay significant damages in the event of an adverse ruling.”

More to come.